The US antitrust regulator has ordered Illumina to cancel the $8 billion Grail deal

The Federal Trade Commission has ordered Illumina to divest from the cancer screening company Grail, arguing that an $8 billion acquisition would hurt competition in the US market for life-saving cancer tests.

The decision reverses an earlier ruling by an administrative law judge in favor of the deal and marks the latest setback for the San Diego-based company’s efforts to diversify into the emerging market for early detection tests for multiple cancers.

The U.S. Antitrust Authority issued an opinion and order on Monday, finding that Illumina’s decision to buy Grail, the company it was initially incorporated in 2016, would reduce innovation in the home market for oncology tests while increasing prices and reducing selection and quality. . of tests. It rejected Illumina’s claim that the acquisition would accelerate the rollout of Grail oncology tests and save lives, stating that the company’s expectations were “vague, self-serving, and unsupported.”

“This is deeply troubling given the importance of rapid development of effective and affordable tools for early cancer detection,” the FTC said in a statement.

Illumina said it intends to promptly file a petition for review with the US Court of Appeals and will seek expedited processing of the appeal. The company said the FTC’s order to reverse the acquisition would be automatically put on hold pending an appeal.

The FTC’s decision followed a similar move by European regulators aimed at canceling Illumina’s purchase of Grail. The world’s largest gene sequencing company made the controversial decision to close its acquisition of Grail in August 2021 despite opposition from the European Commission and the FTC.

The committee is expected to fine Illumina up to 10 percent of its annual sales and issue a final recall order soon.

Illumina’s battle with antitrust regulators has sparked a proxy battle with activist investor Carl Icahn, who alleges the deal cost Illumina up to $50 billion in market value.

On Monday, Icahn reiterated his criticism of Illumina’s decision to close the Grill deal and reiterated his call for the firing of the CEO, Francis D’Souza.

“We believe it is inconceivable that the Board of Directors continues to entrust Mr. de Souza with the management of our potentially great company. During his tenure, the Company has lost not only $50 billion in shareholder value, but many thousands of dollars,” Icahn said in a letter to shareholders. His talented executives have left or are leaving.”

In September, an administrative law judge sided with Illumina over the Grail acquisition, which said the deal would not harm competition. Monday’s Federal Trade Commission opinion and order overturns that ruling.